NYC Real Estate Investors

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NYC Real Estate Investors

Benjamin HeddenBusiness Member
Realtor · New York, NY · Member since 2020 · 10 posts · 5 votes

Hi,

Long time investor out of Birmingham Alabama. Relocated to NYC and selling real estate here. 

Need some insight from anyone involved in buy and hold market in NYC. 


Getting some pretty decent rental property leads. Not really knowing the sure fire buying criteria for NYC investors. Need help from any local investors or anyone familiar with the buy and hold market. 


What kind of cap rates are expected on a stellar deal?

Are we calculating cap rates based on cash purchase or 20% down conventional mortgage?

Main benefits or criteria NYC buy and hold investors are looking for?

What I'm getting at here is in my previous market essentially anything in a C+ area with a 10% cap rate on a 20% down mortgage would be a sure fire sale. I'm looking to get a sense of what these type of deals look like in NYC so when I'm negotiating with the seller I know exactly where price and rents need to be to hit a general buy box. 

Any guidance is greatly appreciated. 

[email protected]205-568-2705
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  • Abel CurielBusiness Member
    Real Estate Agent · Queens, NY · Member since 2016 · 2k+ posts · 1k+ votes
    11mo
    Quote from @Benjamin Hedden:

    Hi,

    Long time investor out of Birmingham Alabama. Relocated to NYC and selling real estate here. 

    Need some insight from anyone involved in buy and hold market in NYC. 


    Getting some pretty decent rental property leads. Not really knowing the sure fire buying criteria for NYC investors. Need help from any local investors or anyone familiar with the buy and hold market. 


    What kind of cap rates are expected on a stellar deal?

    Are we calculating cap rates based on cash purchase or 20% down conventional mortgage?

    Main benefits or criteria NYC buy and hold investors are looking for?

    What I'm getting at here is in my previous market essentially anything in a C+ area with a 10% cap rate on a 20% down mortgage would be a sure fire sale. I'm looking to get a sense of what these type of deals look like in NYC so when I'm negotiating with the seller I know exactly where price and rents need to be to hit a general buy box. 

    Any guidance is greatly appreciated. 


     Hello Benjamin,

    Cap rates on residential multifamily in New York will vary greatly depending on the neighborhoods. 

    Less desirable neighborhoods are more likely to see cap rates upwards of 7-8%. B and C areas could be between 4-7% and the most desirable areas in and around NYC will likely be below a 4% cap rate.

    Cap rates are based on NOI and typically don't include debt service so down payment and loan type won't affect calculations.

    All the best!

    Abel

    REbuild Team - eXp Realty5239 Reviews
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  • Benjamin HeddenBusiness Member
    OP
    Realtor · New York, NY · Member since 2020 · 10 posts · 5 votes
    11mo

    Thanks so much Abel, This helps a bunch

    [email protected]205-568-2705
    0Reply
  • Tucker Connolly
    Real Estate Broker · New York City · Member since 2025 · 1 post · 0 votes
    11mo

    Hey Benjamin,

    Welcome to the NYC market! Definitely a different beast from Birmingham! You’re absolutely right to recalibrate your buy-and-hold criteria. In New York, cap rates can swing drastically, sometimes even block to block, depending on neighborhood dynamics, building class, tenant profile, and whether you’re looking at free-market or rent-stabilized units.

    If you have a specific area you're focusing, I would be happy to give some more insight. 

    0Reply
  • Lindsey Jellig
    Investor · New York NY, USA · Member since 2025 · 25 posts · 8 votes
    11mo

    Great questions @Benjamin Hedden

    The closest to 10% cap rate I'm seeing in NYC these days is a 5–7% — usually in emerging parts of Brooklyn, Upper Manhattan, or the Bronx.

    Just a note — anything above 7% cap in NYC usually means significant deferred maintenance, tenant issues / rent-stabilized mix (with election of Zohran - best to stay away from stabilized buildings bc of the new mayor's rent freeze policy), higher-crime area, or mismanagement that needs a value-add.

    These last few weeks, many people are approaching me with a $500K-$1M budget. In order to ROI with this budget, we will focus in the areas of the Bronx, parts of Queens, and East Brooklyn. Here there are mainly 2-4 unit buildings, strong cash flow but lower appreciation.

    If financing is an issue: and don't have enough income — consider a Debt Service Coverage Ratio Loan, it's specifically for qualifying investment properties (not the buyer) based on how much rental income the property produces. 

      More specific locations to look in for this budget is Bronx, Jamaica, East New York, Canarsie, and Cypress Hill.

      Lots of info there, hope it helps kickstart your journey!

      From one NYC investor to another,
      Lindsey

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    • Frankie VozziBusiness Member
      Member since 2025 · 392 posts · 99 votes
      11mo

      Hey Benjamin welcome to NYC, I sent you a DM!

      [email protected]516-888-7750
      0Reply
    • Account Closed
      Developer · Brooklyn NY · Member since 2019 · 69 posts · 91 votes
      11mo

      Hey Ben, welcome to the NYC real estate market, I've had various rentals here for the last 25 years, and have experienced tremendous appreciation.  Everyone has a different strategy, I only focus on A+ neighborhoods near a subway stop.  I have found this gives you an endless supply on young professionals who are generally great tenants.  That said, I've never really even looked at the cap rate when buying, as you would be hard pressed to find a true 5 cap or above, it's really about wealth creation here.  

      I'm currently finishing my first development project in Cobble Hill Brooklyn, and would be glad to pass along more info. that might be of help to you.  Best of luck on your new adventure!

      Eric

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